SSDI: The Next Ponzi to Collapse


Like most government programs that promise something for nothing, the Social Security Disability Insurance (SSDI) Program has over-promised and will begin under-delivering in 2016.  According to a Phil Moeller, “More than 11 million disabled workers and their family members received SSDI payments last year. The average monthly benefit is about $1,150. In families where other family members also qualified for benefits, the average family benefit at the end of 2013 was $1,973 a month.”

Moeller goes on to suggest that most of the SSDI recipients need the welfare they receive, but further inspection suggests otherwise.  Forbes staff writer Avik Roy first reported the problem back in 2013. “As the below chart shows, the last three times the unemployment rate has gone up due to recession—in the early 1990s, the early 2000s, and the late 2000s—applications for Social Security Disability Insurance have spiked.”  Nothing if more prone to fraud, waste and abuse than a government program.

No one is better at ignoring moral hazard than Uncle Sam.  He seems to think that only honest people will ask for assistance because they really need it.  How naive.  But as our political leaders place more impediments to the free market in place, more Americans feel entitled to sign up for SSDI.  It shouldn’t surprise anyone that SSDI is going broke far faster than actuaries ever predicted.  I’m sure they won’t anticipate the collapse of SSDI’s even bigger Ponzi brother, Social Security, but what else is new?